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Nokia Partners With Yahoo

By ROGER CHENG | Wall Street Journal
Published May 25, 2010

Nokia Corp. and Yahoo Inc. unveiled a partnership to work together on their email, chat and navigation services in an effort to bolster their respective positions in the world of mobile phones.

Nokia will power Yahoo's maps and navigation services, while Yahoo will run the email and chat programs on Nokia's Ovi platform. The companies weren't disclosing the financial terms.

Nokia and Yahoo hope the alliance will improve their profiles in the industry, with Nokia looking to expand its awareness in North America and Yahoo getting its services in more mobile phones around the world, particularly in the emerging markets. Both companies need a catalyst; smartphone players such as Apple Inc., Research In Motion Ltd. and Google Inc. have outpaced the market.

"It's a great example of an approach to partnership, which is increasingly part of our DNA," said Yahoo Chief Executive Carol Bartz.

"This fits well with two companies with key complimentary strengths," said Nokia Chief Executive Olli-Pekka Kallasvuo.

The companies say the partnership will also allow Yahoo to better focus its resources on its consumer experience and other services. Ms. Bartz said that despite the perception of Google's dominance, Yahoo is "neck and neck" in providing Web services. However, she acknowledged that her company was behind in mapping and navigation services. Yahoo also stands to benefit globally because its name will accompany the chat and messaging services found on Nokia phones found around the world.

The Internet search company also taps into Nokia's considerable navigation services. Nokia spent $8.1 billion to acquire Navteq and has made a string of other acquisitions to augment its portfolio of location-based services. "I would say Nokia's mapping offering is unique and second to none in the marketplace," Mr. Kallasvuo said.

Nokia, meanwhile, benefits from Yahoo's strong name recognition in the U.S. The handset maker, one of the largest technology companies in the world, has struggled with the awareness of Ovi, particularly in North America. It hasn't had much success getting the U.S. carriers to push the service or its phones, although the company has made a more concerted effort to focus on the market in the past few years.

While Nokia is the world's largest mobile phone maker, it continued to lose market share, falling from 36.2% to 35% in the first quarter, according to information technology research firm Gartner Inc.

Some critics believe neither company is doing enough to catch up with the industry's faster growing players. "This is a co-branding agreement when both companies probably need more structural changes," said Avi Greengart, an analyst at Current Analysis.

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